Macy’s Inc. (M) shares fell 4.7% to $20.50 in premarket trading on Thursday, September 10, even after the department store chain delivered better-than-expected second-quarter results and raised its full-year outlook for the second time this year. The decline pushed the stock below its 200-day moving average, extending a 4.2% drop from the prior session.
For the fiscal second quarter ended August 1, Macy's reported adjusted earnings of 63 cents per share, well above Wall Street's expectation of 37 cents. However, the result included a 23-cent-per-share tariff refund benefit. Excluding that one-time item, adjusted EPS was 40 cents, still slightly above the 37-cent consensus. Net sales rose 1.1% year over year to $4.87 billion, ahead of the $4.81 billion estimate. Same-store sales across all Macy's properties increased 2.7%, compared with analyst expectations of about 1% growth.
Bloomingdale’s was a standout, with comparable sales jumping 11.3% and achieving its highest second-quarter sales volume in brand history. Bluemercury grew 6.2%, while the core Macy’s stores gained 1.1%. Credit card net revenue also rose 2% to $156 million.
The tariff refunds totalled $98 million received during the quarter and another $18 million after the quarter closed. About $20 million of those proceeds are expected to flow through to full-year EPS, while the remaining $96 million is being reinvested into the company’s multi-year turnaround strategy. CEO Tony Spring said the company remains focused on scaling what is resonating most with customers and building a durable foundation for sustainable, profitable growth.
Macy’s raised its full-year adjusted EPS guidance to a range of $2.15 to $2.35, up from $2.00 to $2.20. Full-year net sales guidance was lifted to $21.68 billion to $21.83 billion, from $21.5 billion to $21.75 billion. Comparable sales are now expected to grow 1% to 1.5%, up from the previous 0.5% to 1.2% forecast. Still, the updated outlook barely cleared consensus and implied a slowdown from earlier quarters.
Investors questioned the quality of the beat because it was padded by a non-recurring $116 million tariff refund windfall. Management said the funds would be deployed into customer growth initiatives rather than passed through as structural cash flow or capital returns. Macy’s shares are now down more than 20% from their recent high. Broader market conditions also pressured the stock, with rising Treasury yields and surging oil prices linked to the Iran war creating a risk-off tone. Wall Street had a consensus Hold rating and a mean price target just above $23 heading into the report, but analysts may lower estimates in the weeks ahead.
